Major grid operator warns legal agreement to shutter coal plant will devastate electric reliability

A major power grid operator that oversees electricity supplies across the mid-Atlantic repeated its warning that the looming shutdown of a coal-fired power plant in Baltimore will threaten the region's grid reliability and may have devastating impacts on consumers.

In a follow-up letter obtained by FOX Business this week, PJM Interconnection warned the shutdown of the Brandon Shores coal power plant is slated to occur before replacement power sources can come online, resulting in "degraded grid reliability" for more than 1 million state consumers, including the entire city of Baltimore.

PJM Interconnection coordinates the movement of wholesale electricity in all or parts of 13 states and the District of Columbia, serving 65 million consumers.

The plant's operator, Texas-based Talen Energy, recently confirmed to FOX Business that it still intends to deactivate the Brandon Shores plant in June 2025 as part of an agreement with the Sierra Club. 

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But PJM has repeatedly warned the region is not prepared for the terms of that settlement and addressed its letter this week to Sierra Club leadership, imploring it to take action.

"As you are aware, Talen is currently prevented from continuing to run without conversion beyond its stated deactivation date under [a Reliability Must Run] framework due to a private agreement it entered into with you. Neither PJM, the federally designated regional grid operator charged with maintaining grid reliability, nor the state of Maryland is a party to this agreement," PJM President and CEO Manu Asthana wrote to the Sierra Club Tuesday.

"This situation requires immediate attention," Asthana continued. "Failure to come to resolution on this issue could result in degraded grid reliability for over 1,000,000 Maryland consumers during peak hours, including the entirety of the city of Baltimore, for the years between the stated deactivation of Brandon Shores and the date whereby needed transmission can be constructed."

He noted in the letter that the agreement between Talen Energy and the Sierra Club would only allow for Brandon Shores' units to restart if the Department of Energy were to declare a state of emergency, a rare action that only allows for the units to continue in operation for 90 days at a time. He said if an emergency were to be declared, "it may be too late to ensure that Maryland consumers can continue to have reliable electric service."

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The letter further called on both the Sierra Club and Talen Energy to amend the agreement to allow the coal plant to continue providing power for consumers until the necessary transmission projects are completed. According to PJM, prematurely closing Brandon Shores sparks the need for new infrastructure to transport electricity from other sources, but such transmission upgrades aren't expected to be finished in Maryland until 2028, three years after the planned Brandon Shores closure.

In November, the Federal Energy Regulatory Commission (FERC) intervened in the situation and approved PJM's nearly $800 million emergency plan for transmission upgrades to blunt the Brandon Shores closure.

FERC Commissioner Mark Christie said Nov. 8 that, without proper upgrades, the shutdown could cause "severe voltage collapse in Baltimore and the surrounding zones, including Northern Virginia, the District of Columbia, Delaware and southeastern Pennsylvania," adding such a scenario would be "potentially catastrophic."

"There has been a strong push for quite some time to get coal power out of Maryland," Christopher Summers, the founder and president of the Maryland Public Policy Institute, told Fox News Digital in an interview last month. "In this accelerated timeline of exiting from coal-fired power plants in the coming 12 to 24 months, I think it's going to create a major reliability concern for the state.

"The loss of power poses a real danger to the well-being and livelihoods of Maryland families and businesses," Summers said. "Until these current risks to our grid are fully dealt with, it's a mistake to close reliable, baseload power plants too soon. That should be a concern to consumers in Maryland and businesses in Maryland that rely on dependable power."

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In 2020, Talen Energy announced it had reached an agreement with the Sierra Club to shutter Brandon Shores and two other major coal power plants in the region. The decision was made in exchange for an agreement from the Sierra Club that aims to avoid future litigation or permit disputes related to coal at Talen Energy's "transitioning sites."

Ralph Alexander, CEO of Talen Energy at the time, said his company's move was part of its transition to green energy and its broader environmental, social and governance (ESG)-focused future. According to the company's current ESG commitments, it plans to entirely eliminate the use of coal in its wholly-owned generation plants like Brandon Shores, which generate more than 5,000 megawatts of power nationwide.

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In addition, while Talen Energy previously said it would convert Brandon Shores to rely on another, less emitting fuel source, it ultimately abandoned that plan and opted to completely close the plant, potentially increasing future reliability concerns. PJM said in its letter to the Sierra Club this week the unexpected change would increase risks.

The Sierra Club didn't respond to a request for comment.